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Fed bailout used to buy National City?

Is PNC going to use some of the $700 Billion Fed money to buy National City? This may be difficult to prove but the idea is just very unsettling. There may be some good uses for this but using it to purchase another bank is just not what the doctor ordered. Nor was it in the minds of the Treasury or was it?

There have been so many historic moves and most likely moves that have never been made public. Keep an eye on the money trail and your fingers on the key board to protest the newest move by the banking industry.

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Posted by Rick Fitzgerald -The MultiFamily Expert on 10/25/2008 11:25 PM

Comments (2)

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2 Comments on Fed bailout used to buy National City?

NOV

2008

Rick,

I definitely believe that the Fed bailout funds will be somewhat utilized allow healthy banks to purchase truly sick or perceived unhealthy banks.

I hope that this "natural selection" or consolidation will allow for the flow or unfreezing of the credit markets and easier lending.

Sincerely,

Sean

NOV

2008

After the post Sean, I began to research this just to see why the Fed would not only allow but encourage the bailout money to be used for any purpose including putting in the vault.

The fact is the FDIC doesn't have the reserves to keep all of the banks healthy. And no one likes to hear a bank failed in their community. So borrowing money from the Fed to buy a sick bank allows the Fed to make a few bucks and get rid of an unhealty bank too.

Not sure if this will encourage banks to lend, but the sooner we move on, the better we all will be.

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